The DLC Comes to Manhattan

July 26, 2002

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This past weekend, the Democratic Leadership Council (DLC) convened a national conversation in New York City. Politicians of all stripes gathered to rub shoulders with lobbyists and corporate contributors in the smarmy swirl that characterizes DLC meetings. The DLC generally uses these occasions to suggest ways that Democrats can benefit by becoming more like Republicans. But on this occasion, members of the DLC should have considered following the example set by Fed Chair Alan Greenspan in his recent Senate testimony: admit up front that they’ve been wrong. For in the current situation, the DLC is simply out of step with the needs of the country and the opinion of a growing majority of Americans. Here are just a few of the issues the DLC gets wrong:

1. At a time when the public thinks big business has too much influence in Washington, the DLC’s mission is to increase the influence of business in the Democratic Party. Or as Simon Rosenberg, head of the DLC’s corporate-funded political action committee, the New Democrat Network, put it, “We’re trying to raise money to help them lessen their reliance on traditional interest groups in the Democratic Party.” But today, two-thirds of the public says big business already has too much influence in Washington. By 50 to 37 percent, Americans say Bush favors the interests of big corporations over ordinary working people. By 49 to 37 percent, they say Democrats favor ordinary working people. That advantage would disappear if the DLC has its way.

2. New Democrats joined with conservative Republicans in contributing to the current mess. DLC icon Senator Joe Lieberman and other New Dems joined with Gingrich and Republicans to pass securities “reform,” a centerpiece of Gingrich’s Contract With America, over President Clinton’s veto. The measure, which the DLC touts to this day, made it harder for shareholders to hold executives and accountants liable for misleading reports. Clinton is surely right to now point to this measure as contributing directly to the current scandals.

New Democrats in the House and Senate, led by the ethically challenged former New Dem co-chair Representative Jim Moran, worked with Republicans to frustrate Arthur Levitt, Clinton’s chair of the Securities and Exchange Commission, in Levitt’s attempt to ban auditors from doing consulting for the companies they audit. As Clinton notes, this led directly to the Enron scandals, in which auditors had every incentive to ignore shady off-the-books maneuvers.

And Lieberman, the DLC’s favored candidate for President, made the fight against honest accounting of executive stock options his personal mission. Honest accounting, urged by such “radicals” like Alan Greenspan and Warren Buffett, would have tempered the abuse of stock options; as things stood, executives had a multimillion-dollar incentive to cook the books in the short term so they could cash out. Lieberman continues to block efforts for this reform to this day, but now claims, in his best Claude Rains imitation, to be shocked that stock options have been abused, and haven’t been used to redistribute wealth, as he thought.

3. New Dems joined with Republicans in diluting efforts to clean up the current mess. New Dems in the House offered bipartisan support for the Republican accounting reform bill that was certified as harmless by the accountants’ lobby. Before the WorldCom revelations, when it looked like reform was going to be bottled up in the Senate, Lieberman and DLC head Al From launched a PR drive to warn Democrats against being antibusiness and doing too much.

Lieberman, as chair of the Senate Operations Committee, has been notably reluctant to trace Enron’s use of political money and clout in the Bush and Clinton Administrations and Congress. Part of the reason may be that, according to Federal Election Commission reports, the New Democrat Network PAC received more than $250,000 in contributions from companies implicated in the Enron scandals, including $25,000 from Enron in 2000 and $20,000 from Arthur Andersen last year.

4. Led by Senator John Breaux, New Democrats have helped to block a real prescription-drug benefit for seniors. The key issue is whether the benefit will use the power of Medicare to negotiate the best price for seniors. For drug companies, this is heresy. They headed a multimillion-dollar fundraiser for Republicans last month, after which President Bush repaid them with a speech opposing efforts to limit drug prices. New Dems are less expensive. According to a study released by Public Citizen, the New Democratic Network pocketed some $475,000 from drug companies over the past twenty-one months, and its single biggest donor was the drug lobby, at $50,000. Breaux is also leading the efforts to turn Medicare into a voucher program, which would increase risk and cost to seniors already struggling to pay soaring health costs on fixed incomes.

5. The DLC champions privatization of Social Security as a centerpiece of its program for the new century. Or in DLC speak, as Will Marshall, one of its founders, puts it, “using choice and competition to advance…the big social insurance programs like Social Security and Medicare.” The DLC provides bipartisan support for a Bush folly that, as Senator Tom Daschle says, would turn Social Security from a guarantee into a gamble.

6. The DLC trumpets the corporate trade agenda, scorning efforts to build environmental and worker rights protections into trade accords. The DLC campaigns on this cause to this day, even as the US trade deficit has reached levels that Alan Greenspan announces are unsustainable, the dollar is sinking and a harsh readjustment is threatened.

7. The DLC opposes affirmative action. DLC leaders initially criticized Clinton’s decision to mend, not end, affirmative action. The Hyde Park Declaration, their last major policy statement, contains a thinly masked call to end affirmative action, saying we should “shift the emphasis of affirmative action strategies from group preferences to economic empowerment of all disadvantaged citizens.”

8. The DLC’s political advice is often wrongheaded. The most recent DLC insight is that Democrats should target affluent, white, office-park males-one of the most Republican constituencies in the electorate. To appeal to that constituency, the DLC says, Democrats should abandon any populist rhetoric, tone down the drive for corporate accountability, embrace fiscal austerity and free trade, and distance themselves from unions. That may make for good corporate fundraising, but it’s hard to imagine a better recipe for defeat.

9. The DLC remains wedded to fiscal austerity, even though we’ve gone from peace and prosperity to war and recession. Like George W. Bush, the DLC sees no reason to allow fundamentally changed conditions to affect its ideological positions. Its support for investment in education and worker training, innovation and R&D, and its opposition to Bush’s tax cuts, have been laudable and helpful. But it remains wedded to a Coolidge Democrat position, arguing that returning the budget to surplus would help generate growth (by lowering long-term interest rates). The DLC has little to offer on policies needed to respond to the current crisis, because interest rates are already low, consumers and companies are tightening their belts, the stock market is tanking and the trade deficit is unsustainable.

Since the DLC is infamous for taking credit for every victory and blaming others for every defeat, its leaders are not likely to admit that they’ve been wrong. So a word of advice to aspiring politicians hoping for a future in the Democratic Party: Go to the banquets. Meet the money. Taste the food. But be wary of the moonshine they are peddling at the podium.